Classic Car Club Manhattan recently invited legendary executive Bob Lutz to have a chat over dinner with old pal and Autopian contributor Bob Sorokanich. As you might expect, with an automotive career stretching over half a century, he’s got some quality stories to tell.
If you’re not familiar with Lutz’s career, just know that it was (mostly) a glittering one. He also didn’t discriminate, working in top executive roles at all of the Big Three automakers in the US. He was executive vice president of Ford, later moving on to become the president and vice chairman of Chrysler Corporation. He later wound up as the vice chairman at General Motors to complete the trio.
As seen on YouTube, Lutz used the chat as a chance to talk about some of his favorite projects over the years, as well as his insights into the auto business. He celebrates unique and standout products in the auto space, and decries the dire lack of real car enthusiasts in the industry.
One of the biggest standouts in Lutz’s career was the Dodge Viper. The V10-powered roadster was an unlikely project that promised to be the first American car with 400 horsepower. Some might have called it a distraction for Chrysler amidst a difficult period, but Lutz doesn’t see it that way at all. In fact, he credits the Viper with revitalizing the broader Chrysler brand. The company was seen as troubled, and barely able to produce more than its humble front-wheel-drive K-Car. The Viper was key to flipping the script, proving to the media and the public that the company could do so much more.
He explains how this affected Chrysler’s dealings with banks at the time. The company was facing possible bankruptcy, with banks looking dimly on the company’s future prospects. Lutz was meeting with the banks to try and shore up the finances, and the Viper became a hot topic. “I was in a German bank which was reacting with difficulty, and they said our chairman would like to speak with you in private,” explains Lutz. “The Chairman said, uh, Mr Lutz… this red sports car, what do you call it?” says Lutz. “I said the Dodge Viper.” The hot new roadster proved crucial. “[He says] ‘Mr Lutz, would you make sure I can buy one, please?’ and that secured the revolving credit agreement with them,” laughs Lutz.
Another bank was already impressed with the future prospects for Chrysler, but they had a tough question. They wanted to know what Lutz would cut if profitability didn’t meet expectations in the next few years. “I thought, well, I’m dealing with bankers here, so I’m going to give the bean counter’s answer,” he says. “I said, sir, without question, the most frivolous product in our portfolio is the Dodge Viper and that’s what we’d cut.” And yet! “The banker says, wrong answer! Wrong answer! That’s the one that’s driving investor enthusiasm!” laughs Lutz.
Making a car like the Viper is hard enough, but succeeding on a barebones budget requires making the right moves. “You gotta collect the right people,” says Lutz. “Many engineers in automobile companies could be working for Hotpoint or Shark vacuum, they wouldn’t care—they put in their day behind the work station, they go home.” He found that the real car enthusiasts in the company were more valuable to a project. “That difference in productivity, it’s three-to-one,” he says. “The whole Viper team, we actually interviewed them to make sure we had the right guys.” Out of 1,000 volunteers, interviews whittled the Viper team down to just 80 people. “They got the job done in a little over two years,” he says.
It was a recurring theme throughout Lutz’s career. “One of my biggest shocks when I joined a car company was there are almost no car guys in car companies,” says Lutz. “These guys could be making washing machines or vacuum cleaners, it’s all the same to them. It’s units, units.” For many, the automotive business really is just a business. “But in every car company, there is a secret network of true car guys,” he explains. “You find out who those guys are, you work with them, and you can create breakthrough products.”
He puts this down as a root cause of the problems faced by many contemporary automakers. “They tend to go by momentum, and they go with the decision that is close to okay and consumes the least capital, and that’s everybody’s favorite decision,” he explains. “Nobody starts at the other end and says what is it that’s really going to excite the customers, what is it that’s going to make us best in class?” He finds this methodology key to making products that aren’t just good, but are exceptional. “Once you’ve defined that, then you work backwards, and you try to trim the investment, and try to massage it a little bit to make it financially feasible.”
“The trouble is most automobile companies start the other way,” says Lutz. “They say, what is conveniently affordable, and now let’s make it as good as we can?” He preferred to follow his own process during his long career. “My way has always turned out to be a little bit more expensive than the momentum way, but I have a track record of producing vehicles that are infinitely more profitable than the momentum theory. ”
He puts much of it down to who’s in charge. “Good finance guys are a dime a dozen, but good car guys that are capable of running [a car company] are rare,” he says. “You give me a car company that’s run by a car guy, and one that’s run by finance, the car-guy company is gonna win every time.”
Naturally, the Plymouth Prowler came up for conversation, the brainchild of storied designer Tom Gale. “He was a hot rodder at heart,” says Lutz. “He was convinced it was going to be second only to the Viper.” In a similar way, the Prowler was also developed as a fast, low-cost program, and the team raided the parts bin to make it happen on budget. The Prowler got a modified version of the company’s front-wheel-drive transaxle, converted to work for a rear-wheel-drive layout. “That’s what dictated the maximum engine size being a V6,” says Lutz. “It couldn’t take the torque of the V8, which was a shame, because that car really needed a V8.”
While the Prowler didn’t go on to do big numbers, Lutz nevertheless believes it had an important role to play. “It was another one of those halo vehicles that caused the media and the public to say, ‘who are those guys?'”
Lutz also discussed differing management styles across the industry, contrasting his approach to that of former Volkswagen CEO Ferdinand Piech. In the 1990s, Piech had apparently told Lutz that he secured excellent panel gaps on VW product by simply threatening to fire those below him if it wasn’t sorted. Lutz tells the story with a laugh, noting that the American management was typically a touch less dictatorial. “The best car guy I’ve ever met in my life,” says Lutz. “But I wouldn’t have wanted to work for him. He was a despot.”
Lutz’s approach at GM was more collaborative. An initial investigation suggested achieving 4 mm panel gaps would cost the company $200 million, which wasn’t in the budget. GM couldn’t spend that, yet weeks later, the panel gaps had drastically improved. “I said, how the hell did this happen?” says Lutz. It turned out that a casual conversation with the workers on the hemming and stamping lines made all the difference. “They said, oh, you want four millimeter gaps?” laughs Lutz. “We know how to do that, it’s just nobody’s ever asked for it before!”
Lutz doesn’t just focus on the high-performance stories, either. He notes that his favorite program was something altogether more sedate. “The [Chevy] Volt was my favorite program, because it stretched the limits of what GM was capable of,” he says. “Doing new gas engines is easy … but doing a series hybrid where you’re on electric propulsion all the time … nobody had ever done that before.” He also notes the public perception issue the brand had around lithium-ion batteries, which he says Toyota was more than happy to talk down in those days. In an argument between GM and Toyota, he notes it was difficult for the American brand to sound like it was making the right reliable choice given the Japanese brand’s reputation.
Ultimately, an hour only barely scratches the surface of Lutz’s broad experience in the industry. Having started his automotive career all the way back in 1963, he saw the rise and fall of giants. It’s always amazing to get insights on what goes on in the sprawling campuses of major automakers, and how that translates into the cars we see on the road every day.
Image credits: Dodge, Chrysler, GM, Plymouth, Classic Car Club Manhattan via YouTube screenshot
there aren’t less enthusiasts, just less folk with enough money to buy a car. the real enthusiast starts out in a cheap beater, learning to repair and modifying for extra ‘oomp’. cars these days allow for very little ‘hot rodding’. and let’s not talk about trying to do an engine swap for ‘more power’.
“I was in a German bank which was reacting with difficulty, and they said our chairman would like to speak with you in private,” explains Lutz. “The Chairman said, uh, Mr Lutz… this red sports car, what do you call it?” says Lutz. “I said the Dodge Viper.” The hot new roadster proved crucial. “[He says] ‘Mr Lutz, would you make sure I can buy one, please?’ and that secured the revolving credit agreement with them,” laughs Lutz.
What a charming story about a banker making questionable financial decisions based on a quid pro quo.
“I was in a German bank which was reacting with difficulty, and they said our chairman would like to speak with you in private,” explains Lutz. “The Chairman said, uh, Mr Lutz… this red sports car, what do you call it?” says Lutz. “I said the Dodge Viper.” The hot new roadster proved crucial. “[He says] ‘Mr Lutz, would you make sure I can buy one, please?’ and that secured the revolving credit agreement with them,” laughs Lutz.
What a charming story about a banker making questionable financial decisions based on a quid pro quo.
Ah yes, an opinion I truly value from the man who murdered Chrysler.
You’re thinking of Bob Eaton, not Lutz. Eaton’s the guy who ate steaks with Schrempp and sold out the company before he jumped ship to Chevron. Lutz and those in product development who left before Eaton pulled the rug out from under everyone in April of ’98 are the ones who made Chrysler look so big and strong that Daimler-Benz went parasitic.
Ah yes, an opinion I truly value from the man who murdered Chrysler.
You’re thinking of Bob Eaton, not Lutz. Eaton’s the guy who ate steaks with Schrempp and sold out the company before he jumped ship to Chevron. Lutz and those in product development who left before Eaton pulled the rug out from under everyone in April of ’98 are the ones who made Chrysler look so big and strong that Daimler-Benz went parasitic.
I always liked his idea for turning Pontiac into the economy performance brand on Cadillac platforms. I wish he had gotten that through
I always liked his idea for turning Pontiac into the economy performance brand on Cadillac platforms. I wish he had gotten that through
Drop dead, Bob.
Sincerely, a car guy. Just because I’m into cars that you’re not into doesn’t make me not an enthusiast. Kiss my ass.
Drop dead, Bob.
Sincerely, a car guy. Just because I’m into cars that you’re not into doesn’t make me not an enthusiast. Kiss my ass.
I like hearing his stories, even though I disagree with at least 50% of his takes. But what’s funny is that the guy is always gripping a stogie in every single interview I’ve seen him do post-retirement. Thus, as he gets older, he reminds me more and more of Uncle Lewis (William Hickey) in National Lampoon’s Christmas Vacation.
I like hearing his stories, even though I disagree with at least 50% of his takes. But what’s funny is that the guy is always gripping a stogie in every single interview I’ve seen him do post-retirement. Thus, as he gets older, he reminds me more and more of Uncle Lewis (William Hickey) in National Lampoon’s Christmas Vacation.
Hell yeah, the Viper was so awesome…along w/ the SRT-10 w/ Viper engine…if you don’t like these vehicles (or similar), you’re dead inside. Yeah, I can’t control that there’s less enthusiasts (which can also change- there’s still more people getting interested) but I can still call it sad. I’ll never understand these people who just view cars as appliances and say “as long as it gets me to where I’m going” and “as long as it works, I don’t need to understand how it does” w/o an inkling of interest…are you really that boring? Do you not have a personality? Do you really have no life at all? Yes!
There are so many interesting cars, especially classic cars over the last 100+ years (besides newer cars, most of them suck) that if you can look at all of them and say “oh, none of them interest me” then you really are dead inside
Are you surprised? Even the comments here on an enthusiast site would have you thinking a Rav4 Prime is exciting and desirable.
My work has a couple as fleet vehicles… The Rav4 Prime is the epitome of *an automobile*. It’s an appliance. It’s just kinda…there. There is literally nothing interesting about it at all. For most people, that’s what they want, I guess? It only doesn’t come in beige because that would be too interesting in a sea of silver.
(The CR-V is interchangeable if one likes burning more fuel.)
Hell yeah, the Viper was so awesome…along w/ the SRT-10 w/ Viper engine…if you don’t like these vehicles (or similar), you’re dead inside. Yeah, I can’t control that there’s less enthusiasts (which can also change- there’s still more people getting interested) but I can still call it sad. I’ll never understand these people who just view cars as appliances and say “as long as it gets me to where I’m going” and “as long as it works, I don’t need to understand how it does” w/o an inkling of interest…are you really that boring? Do you not have a personality? Do you really have no life at all? Yes!
There are so many interesting cars, especially classic cars over the last 100+ years (besides newer cars, most of them suck) that if you can look at all of them and say “oh, none of them interest me” then you really are dead inside
Are you surprised? Even the comments here on an enthusiast site would have you thinking a Rav4 Prime is exciting and desirable.
My work has a couple as fleet vehicles… The Rav4 Prime is the epitome of *an automobile*. It’s an appliance. It’s just kinda…there. There is literally nothing interesting about it at all. For most people, that’s what they want, I guess? It only doesn’t come in beige because that would be too interesting in a sea of silver.
(The CR-V is interchangeable if one likes burning more fuel.)
Ugh, I was content reading this until the shot about Toyota and lithium-ion. At the time NiMH was better for cars use, decent capacity, much less fire risk, more developed(in use since mid-90s).
NiMH batteries were developed for cars by Ovonics, GM took over Ovonics and sold their shares off to Texaco, who sued Toyota for continuing to use it, only to settle and allow Toyota to keep using them in limited capacity for like the Prius.
If the Volt was made with NiMH instead of Lithium, would’ve been cheaper, more durable, for slightly less range, or actually if they’d have continued developing NiMH maybe about the same range since with Lithium they have to have built in buffers.
So Lutz’s accomplishments aside, saying Toyota got it wrong on lithium really grinds my gears, GM got it wrong on NiMH and 90s corporate greed set us all back at least 10 years on EVs.
Also yes the Prowler should’ve had a V8.
NiMH was good enough in the 1990s/early 2000s that streamlined sedans with 150-200 miles range were possible. It was capable of accepting a fast charge and charging from 0 to 80% in under 30 minutes. Robert Stemple, former chairman of Energy Conversion Devices, claimed $150/kWh in production volume for 20,000 cars per year.
Ugh, I was content reading this until the shot about Toyota and lithium-ion. At the time NiMH was better for cars use, decent capacity, much less fire risk, more developed(in use since mid-90s).
NiMH batteries were developed for cars by Ovonics, GM took over Ovonics and sold their shares off to Texaco, who sued Toyota for continuing to use it, only to settle and allow Toyota to keep using them in limited capacity for like the Prius.
If the Volt was made with NiMH instead of Lithium, would’ve been cheaper, more durable, for slightly less range, or actually if they’d have continued developing NiMH maybe about the same range since with Lithium they have to have built in buffers.
So Lutz’s accomplishments aside, saying Toyota got it wrong on lithium really grinds my gears, GM got it wrong on NiMH and 90s corporate greed set us all back at least 10 years on EVs.
Also yes the Prowler should’ve had a V8.
NiMH was good enough in the 1990s/early 2000s that streamlined sedans with 150-200 miles range were possible. It was capable of accepting a fast charge and charging from 0 to 80% in under 30 minutes. Robert Stemple, former chairman of Energy Conversion Devices, claimed $150/kWh in production volume for 20,000 cars per year.
The biggest proof to me that there are no car guys in most car companies is how they option the enthusiast vehicles. Want the model with the powerful engine and better suspension? Well here’s the full leather interior, 12-way power seats, 20″ wheels, the biggest infotainment screen we make, and no, you can’t downgrade any of those. They don’t see those models as “enthusiast” cars, they see them as the most “premium”. To add insult to injury, models with those features stripped out will be given a fancy label and cost even more!
I agree, but it works for them with the customer base as a whole. That’s why performance divisions founded on the track, like M or AMG, move away from the compromise of all out performance to become luxo-laden barges with a more powerful engine and a jacked up price. A lot of the higher end buyers go in with, “What’s the best (most expensive) one?” and they don’t really care about history or actual performance they won’t and can’t use so much as looking better to people who care about tags and labels. Same with pure sports car models that tend to become bloated cruisers, posting much higher sales when they do until their street cred wears off and they get dropped. We’re a small minority and always have been (in spite of the rose-colored glasses of nostalgia). Golden Age of muscle? Most were sold with the small engines. Wide variety of high end sports car makers? Total sales volumes were very low (hence why so few of the old makers still exist today and those that do are owned by a bigger company after probably fighting off several bankruptcies and being tossed around to multiple former owners). Ferrari probably makes more cars annually than the whole exotic industry did in the late ’60s, never mind earlier when many of their models were built in the double digits and the “mass produced” ones in the threes. So, as much as we hate it, it works. There’s only so much room for a Morgan or any other truly enthusiast marques that barely scrape by with low production for as long as they can.
The biggest proof to me that there are no car guys in most car companies is how they option the enthusiast vehicles. Want the model with the powerful engine and better suspension? Well here’s the full leather interior, 12-way power seats, 20″ wheels, the biggest infotainment screen we make, and no, you can’t downgrade any of those. They don’t see those models as “enthusiast” cars, they see them as the most “premium”. To add insult to injury, models with those features stripped out will be given a fancy label and cost even more!
I agree, but it works for them with the customer base as a whole. That’s why performance divisions founded on the track, like M or AMG, move away from the compromise of all out performance to become luxo-laden barges with a more powerful engine and a jacked up price. A lot of the higher end buyers go in with, “What’s the best (most expensive) one?” and they don’t really care about history or actual performance they won’t and can’t use so much as looking better to people who care about tags and labels. Same with pure sports car models that tend to become bloated cruisers, posting much higher sales when they do until their street cred wears off and they get dropped. We’re a small minority and always have been (in spite of the rose-colored glasses of nostalgia). Golden Age of muscle? Most were sold with the small engines. Wide variety of high end sports car makers? Total sales volumes were very low (hence why so few of the old makers still exist today and those that do are owned by a bigger company after probably fighting off several bankruptcies and being tossed around to multiple former owners). Ferrari probably makes more cars annually than the whole exotic industry did in the late ’60s, never mind earlier when many of their models were built in the double digits and the “mass produced” ones in the threes. So, as much as we hate it, it works. There’s only so much room for a Morgan or any other truly enthusiast marques that barely scrape by with low production for as long as they can.
This is true in the marine industry as well. Most employees can’t afford the products they work on, and never will be able to afford them, so they just sort of don’t care about boats and being on the water.
LOL I read this comment while sitting next to a hiring ad for presumably the submarine shipyard in Groton CT.
I don’t think the workers there could afford what they build either.
A very good friend is an engineer there, can confirm.
I should think that some of the engineers there later find lucrative careers in the South American export-import industry.
Though I have no proof this is the case.
Which part of the marine industry are you referring to? I work in the powersports industry and personally work with hundreds of marine dealers every week and everyone I talk to loves it.
I’m sure people who work at the dealers love it. But the engineers designing the 300hp outboards that cost $30k after an employee discount are not affordable to 99% of the population.
I worked briefly as a marine mechanic before moving to telecom and what I determined is that I don’t want what anyone’s selling and certainly not at the insane prices. Anytime someone thinks cars are overpriced, they should take a look at boats—even little shitty ones that aren’t much of anything but some fiberglass with a motor (that doesn’t have to meet the emissions standards that cars do) hanging off the back. My plan is to build my own design that isn’t an overweight gas hog that’s excessively fat to pack as big a party as one can for the length with a bunch of junk features that require more maintenance.
This is true in the marine industry as well. Most employees can’t afford the products they work on, and never will be able to afford them, so they just sort of don’t care about boats and being on the water.
LOL I read this comment while sitting next to a hiring ad for presumably the submarine shipyard in Groton CT.
I don’t think the workers there could afford what they build either.
A very good friend is an engineer there, can confirm.
I should think that some of the engineers there later find lucrative careers in the South American export-import industry.
Though I have no proof this is the case.
Which part of the marine industry are you referring to? I work in the powersports industry and personally work with hundreds of marine dealers every week and everyone I talk to loves it.
I’m sure people who work at the dealers love it. But the engineers designing the 300hp outboards that cost $30k after an employee discount are not affordable to 99% of the population.
I worked briefly as a marine mechanic before moving to telecom and what I determined is that I don’t want what anyone’s selling and certainly not at the insane prices. Anytime someone thinks cars are overpriced, they should take a look at boats—even little shitty ones that aren’t much of anything but some fiberglass with a motor (that doesn’t have to meet the emissions standards that cars do) hanging off the back. My plan is to build my own design that isn’t an overweight gas hog that’s excessively fat to pack as big a party as one can for the length with a bunch of junk features that require more maintenance.
MBA’s yet again ruining everything, although in this case with an assist from the light truck exemption.